It seems that a number of people who opened IRAs and Roth IRAs recently are having crises… can’t pay the bills or they lost their income, so they are asking for help on closing their retirement accounts. Reddit tends to have a young crowd, so I’m guessing sub-40 years old? This seems to me to be a real-time indicator of the situation.
Liz Ann Sonders, Chief Investment Strategist at Charles Schwab mentioned last week on a podcast that continuing unemployment claims are going up… people getting and staying unemployed… so they’re running out of money, then closing retirement accounts so they can grab something to spend.
It’s people making poor money management choices. At 3.9% unemployment is still really low from a historical perspective. We are basically at full employment for anyone who wants to work.
41% of people cash out their 401K when they change jobs. Thank goodness people can’t cash out their social security. Lots of people would do it.
